Thursday, 21 April 2016

With US equities closing moderately lower, the VIX climbed for a second consecutive day (intra high 14.14), settling +5.0% @ 13.95. Near term outlook offers the sp'2060s, which will likely equate to VIX in the 15.50/16.25 zone. Sustained action above the key 20 threshold looks out of range for another few weeks.

VIX'60min

VIX'daily3

Summary

Despite a second daily gain, the VIX remains broadly subdued, although it does look like we have a short term low of 12.50. The 15/16s look due tomorrow/Monday... ahead of the FOMC.

If sp'2050/40s by end month, VIX 17/18s look probable.

Sustained action above the key 20 threshold looks out of range until latter half of May.

US equity indexes closed moderately lower, sp -10pts @ 2091. The two leaders - Trans/R2K, settled lower by -1.2% and -0.6% respectively. Near term outlook offers the 2065/61 gap zone, before some chop into the FOMC of April'27th.

sp'60min

Summary

*closing hour action: minor chop
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So.. we've now swung from 2111 to an intra low of 2088.. 23pts.... its a start, right?

The 2065/61 zone looks pretty straight forward to hit.. whether tomorrow or next Monday. Then the market will likely trade in a holding pattern into Wed' afternoon.

Once the FOMC is out of the way, then its merely a case of whether the bull maniacs are willing to resume buying... or keep on bailing into end month.

*it is notable we have the Q1 GDP next Thursday, so the latter half of next week will likely be very dynamic.

With a break into the sp'2080s - and with VIX 14s, there is increasing clarity that the market will see broad cooling into end month. The gap zone of 2065/61 looks set to be hit tomorrow, or more viable... early Monday. The more interesting issue is whether the monthly close will be in the 2050s.. or even lower.

sp'60min

VIX'60min

Summary

Well, not much to add. In scheme of things these are still small moves... but today does make for a good reversal.. esp' for metals and oil.

notable weakness: FCX -5.5%.... even moderate market declines will see this 'junk' get trashed.

US equities are increasingly weak, with a net daily decline in the sp'2090/85 zone - with VIX 14s, highly probable. Metals remain very weak - relative to early powerful gains, Gold +$4, with Silver +0.5%. Oil is -0.8%, having cooled from early gains of almost 2%.

sp'daily5

VIX'daily3

Summary

Well, its 2pm... and I come home to see that Prince died. No doubt, clown finance TV will give that considerable (if not blanket) coverage for the rest of today.

Equities look set to remain on the weak side... with the 2070s due tomorrow, 2060s seem more viable next Monday.

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Here in London city....

Its still not too late to buy an overly small and overly priced London property, before the bubble/economy implodes.

With a break of short term rising trend, there can now be some confidence that sp'2111 is (at least) a short term top. The obvious question is.. having rallied 301pts (16.6%), how low might an initial retrace go? Based on many previous cycles.. a valid target is a very minor 23.6% fib retrace to sp'2040.

sp'daily3

VIX'daily3

Summary

In the previous cycle Oct'2015.. the retrace from 38%.. where the lower daily bollinger was.

However, right now, any price action <2K looks extremely difficult. Instead.. a retrace to around 2040 - just above the recent lows of 2039/33 looks realistic by end of next week/month.

So.. for me, its a case of seeing how the market trades next Thurs/Friday.

An April close in the sp'2050/40s would at least make for a somewhat spiky RED candle for the month.
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US equities remain choppy, and having seen a clear break of short term rising trend/support, are still leaning to the downside. A daily close in the sp'2090/85 zone - with VIX 14s, looks probable, which should clarify the 2065/61 gap zone will be hit late Friday.. or more viable - Monday, ahead of the Wed' FOMC.

sp'60min

VIX'60min

Summary

So... a lot of chop.... a great many reversals (esp' in metals/Oil)... but we're still not seeing any sig' equity downside.

The sp'2060s looks due before the FOMC... with the 2050/40s viable as an April close.

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notable weakness... UAL, daily

A clear bear flag, with UAL having failed to break and hold the $61s in late March. Next support is the 50/49 zone, then $42s.
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time for... tea :)
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**I see on ZH... UBS noting sp'2033 as key support... as I've been droning on about the last few days.

US equity indexes are seeing some minor chop... but unlike yesterday, the technical break of trend (from sp'2039) has occurred. A move to around 2090/85 seems probable today. More significant downside to the gap zone of 2065/61 will be more viable next Monday. Metals/Oil are both holding very significant reversals.

sp'60min

GLD, daily

USO, daily2

Summary

I realise a few out there will already be spooked at what is only minor chop... but we do have a break... and a net daily decline looks highly probable.

US equities open fractionally higher, but there is a rather clear reversal underway.. not just in equities, but all over the place. Most notable of all, Gold has swung from +$25 to +$5, with a rather stark black-fail spiky candle. Oil has imploded from gains of almost 2% to -1.0%.

sp'60min

VIX'60min

GLD, daily

Summary

Finally.. we have a BREAK of short term rising equity trend.

There will be support around sp'2090... but the door is now open to the 2065/61 zone by late tomorrow/Monday.

Good morning. US equity futures are a little higher, sp +3pts, we're set to open at 2105. USD is -0.4% in the DXY 94.10s. Metals continue to soar, Gold +$22, with Silver +4.2%. Oil is +1.6% in the $44s.

sp'60min

WTIC, weekly2

Summary

*ECB: rates u/c... the QE continues.. as they strive for inflation.
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To break trend, equity bears only need a daily close <sp'2107.

The 2065/61 zone remains first target, and its notable that if 2061 is hit within a few days.. that'd be a swing of 50pts (2.4%) from yesterday's new cycle high.

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Update from Oscar

Clearly, commodities and stocks have seen some very strong gains recently. Yet many in the mainstream are still saying rates will remain low and QE - BoJ/ECB, will continue.

We can't have both. If the supply of commodities - relative to demand, really has changed.. we have a major inflationary bubble that could get out of control real fast.

My outlook still leans on the deflationary side, but if WTIC oil >$50... along with new historic highs in stocks... watch out!
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There are just seven trading days left of April, and as ever, the monthly close will be important. Equity bears look in dire trouble, as there is threat of the market closing at/near the highs, which would be suggestive May will see new historic highs.

sp'monthly1b

Nasdaq comp', monthly

Summary

*its been an annoying day... and I'll keep this brief.
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Even if the market starts to cool from today's highs, its going to be pretty difficult to get a monthly close under the recent gap zone of 2065/61.

For me, the low of sp'2033 is very important, and until bears can attain a few daily closes in the 2020s or lower.. there can be little confidence of much lower levels.

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Looking ahead

Thursday will see the usual weekly jobs, phil fed', house price index, and leading indicators.

US equity indexes closed a little higher, sp +1pt @ 2102 (intra high
2111). The two leaders - Trans/R2K, settled u/c and +0.2% respectively.
Near term outlook still offers cooling to the gap zone of 2065/61, but a
monthly close <2050 looks increasingly difficult.

sp'daily

Dow

Summary

Suffice to add, despite some closing hour weakness, it was another day for the equity bulls, having broken new cycle highs across all the main indexes.

Until equity bears can attain a few daily closes under the recent key low of sp'2033, there can't be much confidence on the bearish side.

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